ALL GUMMED UP
City taxpayers stuck with triple whammy on abandoned Wrigley factory
The abandoned factory that the Wm. Wrigley Jr. Co. left behind in Bridgeport has been like a wad of gum stuck to the shoes of Chicagoans.
First, Wrigley shut down the factory, sending 600 jobs to the far suburbs, in 2006 — four years after Mayor Richard M. Daley gave the company $ 16 million in tax breaks to keep its headquarters in Chicago.
Then, Wrigley sold the 31- acre site including the shuttered chewing gum factory for nearly $ 4.9 million. The buyers? A group of Lombard businessmen who, within months, had Daley’s nephew, attorney Patrick Daley Thompson, working to cut their property taxes on the land.
Then, Thompson’s clients got $ 8 million by selling 13 acres of the Wrigley land to ComEd so the utility could build an employee training center, a $ 41 million project that its electricity customers throughout northern Illinois are covering through their monthly bills.
Now Thompson, who has since been elected alderman of the 11th Ward — which includes the partially demolished gum factory — will have a big role in what happens to the rest of the Wrigley property owned by the Lombard businessmen.
Thompson and his Loop law firm started handling the tax appeals on the Wrigley property in 2012 and continued after his election in 2015. Altogether, they have saved the Lombard group more than $ 525,000 in taxes on the land, records show.
The owners’ plans call for a shopping center and stores on the remaining 18 acres, including the old factory — projects that will need Thompson’s approval as alderman.
Thompson wouldn’t discuss his relationship with the Lombard businessmen or their company, 3535 Ashland LLC, named for the address of the former chewing gum factory.
This is a story about how a shuttered factory has caused a series of economic hits for Chicagoans. First, the Daley administration doled out millions in subsidies to Wrigley with the expectation its factory would remain open. Then, the city lost hundreds of manufacturing jobs when the factory was shut down by Wrigley. Now, ComEd customers are paying higher electric bills to cover the cost of redeveloping the land that Wrigley left behind.
It all began in 2002, when Wrigley began talking about relocating its corporate headquarters to the suburbs. Daley and the Chicago City Council agreed to give the company $ 16 million in taxpayer subsidies to stay in Chicago, where it was
founded in 1891.
Wrigley agreed to stay and build a headquarters, lab, research facility and parking garage on Goose Island along the Chicago River, just south of North Avenue on the North Side.
In the negotiations with Wrigley, the mayor said he was given assurances that the Bridgeport factory, about a mile west of his boyhood home, would remain open. City officials pledged to get that commitment in writing.
But everything changed in 2005, when Mars Inc. bought Wrigley. The Goose Island project was downsized to two, rather than four buildings — the lab and the research facility. And the company announced it would close the 95- year- old factory where it made Wrigley’s Spearmint, Juicy Fruit, Big Red and other popular chewing gum brands, moving production to Yorkville.
Daley, it turned out, had never received a written guarantee that Wrigley would keep the plant open.
Since all of the planned construction on Goose Island wasn’t completed, though, city officials have said Wrigley will get no more than $ 11.1 million in tax subsidies.
The chewing gum manufacturer reportedly wanted $ 19 million for the abandoned factory site when the “for sale” signs went up in 2009. Wrigley sold the sprawling property on April 30, 2012, to 3535 Ashland LLC, a company managed by three Lombard businessmen: James Avgeris, Bradley Gdowski and Stewart Mills. They paid nearly $ 4.9 million.
They hired Thompson, an attorney with the law firm of Burke, Warren, MacKay & Serritella, who at the time was also an elected member of Cook County’s sewage treatment agency — the Metropolitan Water Reclamation District of Greater Chicago.
Thompson — who lives about a mile east of the Wrigley property in the bungalow where his late grandfather Mayor Richard J. Daley lived — persuaded Assessor Joseph Berrios to reduce his proposed higher assessments on the Wrigley buildings and land in 2012. He saved the Lombard group more than $ 83,000 in taxes for that year.
ComEd says it began looking at the vacant Wrigley property in April 2014 to build a training center, as mandated by Illinois legislators in 2011 when they overrode Gov. Pat Quinn’s veto to approve a $ 2.6 billion ComEd plan to upgrade its distribution system and provide customers with “smart meters.” Quinn had argued ComEd’s plan would cause “blockbuster annual rate hikes.”
The Chicago training center “was something the Legislature wanted them to do to create jobs,” says former state Sen. Mike Jacobs, D- Moline, who sponsored the ComEd legislation.
ComEd spokesman John Schoen says the utility focused on the Wrigley property after rejecting three similar- size sites — 3000 S. Damen, 2500 S. Corbett and 2000 W. 32nd St. — that ranged in price between $ 6.5 million and $ 12 million. The Corbett property was too close to a heliport in Thompson’s ward. ComEd couldn’t reach a deal with the other property owners, who included businessman Fred B. Barbara, a Daley friend.
The Wrigley property — on the southwest corner of 35th and Iron streets — “did not have the limitations the above sites had,” according to Schoen. “The site was well located, was easily accessible to employees and the public through main transportation arteries, had the necessary space to build and operate the training center. The environmental concerns were manageable, and the surrounding properties did not present any potential concerns or interference.”
The Lombard businessmen agreed to sell ComEd 13 acres for $ 8 million — 63 percent more than they paid Wrigley for the entire 31 acres — in September 2014. The purchase was approved by ComEd management, though not its board of directors.
“There was supposed to be a training center,” says David Kolata, executive director of the Citizens Utility Board, a consumer group. “Certainly, they didn’t have an obligation to build it where they built it.”
ComEd spent about $ 8.5 million to clean up the property — costs Schoen says “were in line with or lower than other sites.”
ComEd management hired Elzie Higginbottom, a clout- heavy contractor and campaign fundraiser for Daley and many other Democrats. Higginbottom’s Burling Builders was among “approximately nine contractors” that submitted bids to build the 50,000- squarefoot training center, according to Schoen, who says, “We are not at liberty to disclose the identities of the competing bidders or their confidential submittals.”
ComEd won’t say how much it paid Higginbottom to build the $ 41 million training center, which opened in February 2016. It includes classrooms, other indoor training space, an auditorium and a 240,000- square- foot outdoor training yard. There is an indoor pole yard and space to teach splicing for underground cables. ComEd estimates 4,000 employees will be trained there every year.
While ComEd was negotiating to buy the land in 2014, Thompson’s law partner Thomas Boyle appealed the county’s revised assessments for the Wrigley property, getting him to lower them — which saved the Lombard group more than $ 324,000 on its 2014 property taxes, records show.
“One of my partners at the firm asked me to handle the appeal,” says Boyle, who’s now at another law firm. “It was Patrick Daley Thompson. It was his client.”
Boyle says he doesn’t know why Thompson asked him to file the appeal, which came as he was preparing to run for alderman.
A few months after Thompson was elected alderman in May 2015, Boyle filed another appeal, saving the Lombard group another $ 120,000.
As alderman, Thompson got the City Council to approve signs for ComEd’s training center. He and Mayor Rahm Emanuel were among officials at a ceremony marking the opening of the ComEd facility, which so far is the only project built on the old Wrigley land.
But Stewart Mills, one of the Lombard businessmen, says another deal is in the works.
“We have 12 of the 18 acres under contract for a shopping center,” Mills says. “We hope to do retail on the other six acres.”
As alderman, Thompson has significant input on development in his ward — including the remaining Wrigley property owned by the businessmen he has represented. Those developments will likely need permits that will need Thompson’s approval.
When Thompson was running to succeed Ald. James Balcer, Balcer got the City Council to amend the zoning regulations for the “Stockyards Planned Manufacturing District” that includes the Wrigley property. The revised rules give city officials more control of commercial development of the old Wrigley land.
Under those rules, construction of a shopping center covering more than two acres of the Wrigley site or of any store over 60,000 square feet need approval from city officials, including a thumbsup from Thompson.